Investor Presentation May-June 2018
Legal Disclaimer Forward-Looking Statements This presentation includes “forward -looking statements” within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include all statements that do not relate solely to historical or current facts, and you can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “trends,” “plans,” “estimates,” “projects” or “anticipates” or similar expressions that concern our strategy, plans, expectations or intentions. All statements made relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results are forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, it is very difficult to predict the effect of known factors, and, of course, it is impossible to anticipate all factors that could affect our actual results. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be realized. Important factors could affect our results and could cause results to differ materially from those expressed in our forward- looking statements, including but not limited to the factors discussed in the section entitled “Risk Factors” in Summit Materials (“Summit, Inc. ”) Annual Report on Form 10-K for the fiscal year ended December 30, 2017, as filed with the Securities and Exchange Commission (the “SEC”), any factors discussed in the section entitled “Risk Factors” in our quarterly reports on Form 10-Q or other SEC filings and the following: our dependence on the construction industry and the strength of the local economies in which we operate; the cyclical nature of our business; risks related to weather and seasonality; risks associated with our capital-intensive business; competition within our local markets; our ability to execute on our acquisition strategy, successfully integrate acquisitions with our existing operations and retain key employees of acquired businesses; our dependence on securing and permitting aggregate reserves in strategically located areas; declines in public infrastructure construction and delays or reductions in governmental funding, including the funding by transportation authorities and other state agencies; environmental, health, safety and climate change laws or governmental requirements or policies concerning zoning and land use; conditions in the credit markets; our ability to accurately estimate the overall risks, requirements or costs when we bid on or negotiate contracts that are ultimately awarded to us; material costs and losses as a result of claims that our products do not meet regulatory requirements or contractual specifications; cancellation of a significant number of contracts or our disqualification from bidding for new contracts; special hazards related to our operations that may cause personal injury or property damage not covered by insurance; our substantial current level of indebtedness; our dependence on senior management and other key personnel; supply constraints or significant price fluctuations in electricity and the petroleum-based resources that we use, including diesel fuel and liquid asphalt; unexpected operational difficulties; and interruptions in our information technology systems and infrastructure; potential labor disputes; and rising prices for commodity, labor and other production and delivery costs as a result of inflation or otherwise. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements. Any forward-looking statement that we make herein speaks only as of the date of this presentation. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law. Non-GAAP Financial Measures Included in this presentation are certain non-GAAP financial measures, such as Adjusted EBITDA, Further Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted (Diluted) Earnings Per Share, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Net Debt, Net Leverage and Free Cash Flow designed to complement the financial information presented in accordance with U.S. GAAP because management believes such measures are useful to investors. These non-GAAP financial measures should be considered only as supplemental to, and not superior to, financial measures provided in accordance with GAAP. Please refer to the appendix of this presentation for a reconciliation of the historical non-GAAP financial measures included in this presentation to the most directly comparable financial measures prepared in accordance with GAAP. This presentation also includes certain unaudited financial information for the last twelve months (“LTM”) ended March 31, 2018, which is calculated as the three months ended March 31, 2018 plus the actual or pro forma year ended December 30, 2017 less the actual or pro forma three months ended April 1, 2017. This presentation is not in accordance with GAAP. However, we believe that this information is useful to investors as we use LTM financial information to evaluate our financial performance for ongoing planning purposes, including a continuous assessment of our financial performance in comparison to budgets and internal projections. In addition, we use such LTM financial information to test compliance with covenants under our senior secured credit facilities. Reconciliations of the non-GAAP measures used in this presentation are included or described in the tables attached to the appendix. Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures. 1
Summit Materials Overview Pure-Play, Vertically-Integrated Heavy Materials Business Our Value Proposition Materials-based positions in well-structured, early-cycle markets Integrated supplier of construction materials (aggregates, cement), products (ready-mix concrete, asphalt) and paving services Favorable long-term industry dynamics within private and public end-markets 2/3 of net revenue = early cycle residential/non-residential end markets; 1/3 of net revenue = state public infrastructure spending Exceptional record of financial growth and operational execution Since IPO (2015), generated significant growth in net revenue, adjusted EBITDA, net income, all while reducing net leverage Unique acquisition strategy with proven integration experience Focused on acquiring/integrating/improving assets in well-structured markets Proven management team with decades of industry experience Founded by Tom Hill (current CEO) and former CEO of OldCastle Materials Leading Positions In Early-Cycle Markets Consolidating Fragmented Materials Markets 16 $3,500 14 14 $3,000 12 12 $2,500 9 10 $2,000 8 8 8 7 $1,500 6 4 $1,000 3 4 2 $500 1 2 0 $0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD Market Exposure Top 4 Market By Net Revenue (2017) Number of Acquisitions Cumulative Spend ($MM) 2
U.S. Heavy Materials Industry Is Fragmented Opportunity for Consolidation In Well-Structured Markets Total Market Opportunity Approaching $100 billion Industry Snapshot By Line of Business Estimate ~60% of Aggregates Pits Are Privately Held (1) Opportunity Set “By The Numbers” (1) U.S. Aggregates Industry Asphalt More Than 4,000 Industry Participants Industry $30 billion ~2.3 billion Tons Sold (2016) U.S. Cement Industry ~100 Plants; 80% Foreign Owned Ready-Mix ~95 Million Tons Sold (2016) Concrete Industry U.S. Ready-Mix Concrete Industry $35 Billion More Than 5,500 Plants Cement Consumes 75% of U.S. Cement Industry $10 Billion U.S. Asphalt Industry Aggregates Industry More Than 3,500 Plants $23 Billion ~120 Million Tons (2016) Sales ($ Bil) (1) Source: ARTBA, PCA, USGS, NRMCA, NAPA, Company Estimates 3
Leading Positions In Attractive Markets #1-2 Player More In 80%+ of Our Materials Markets (1) Building Leadership Positions Through Both Acquisitions & Organic Growth We are a #1-2 player in 80% of the time in Materials, 75% in Products Materials-based positions in early-cycle markets – industry remains highly fragmented Leveraging our vertically integrated model – benefits of scale + local focus Top 10 aggregates supplier, top 15 cement producer in the U.S. Operating in 23 U.S. states and British Columbia Materials Lines of Business Products Lines of Business SUM Has a #1-2 Position In ~80% of Its Markets SUM Has a #1-2 Position In ~75% of Its Markets #3+ Player in #3+ Player in 20% of SUM Markets 25% of SUM Markets #1-2 Player In 75% #1-2 Player In 80% of of SUM Markets SUM Markets (1) Company estimates; updated annually 4
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